DSP ELSS Tax Saver Fund

DSP ELSS Tax Saver Fund has delivered a 10Y SIP XIRR of 17.78% and 5Y XIRR of 18.51%, comfortably ahead of the category averages of 15.77% and 16.76% respectively. The 3Y XIRR of 18.5% also outpaces the category's 14.54%, showing consistent outperformance across multiple horizons. However, calendar year 2026 has so far delivered -9.13%, indicating near-term volatility.

The maximum drawdown of -0.37% with a 59-day duration suggests a favorable recent drawdown profile, though the fund has experienced 9 drawdown events exceeding 10%. Calmar ratios between 0.45 and 0.53 across all horizons indicate steady risk-adjusted returns with the 1Y Calmar of 0.5325 being the strongest. Long-term investors should note that year-level returns can swing widely, from -9.13% in 2026 to 52.66% in 2014.

The portfolio is heavily concentrated in banks, with the top five holdings all being banks (ICICI Bank 9.69%, HDFC Bank 8.97%, Axis Bank 7.97%, SBI 5.59%, Kotak 3.89%) and banks comprising 37.1% of NAV. The remaining book is reasonably diversified across 58 holdings with telecom, petroleum, IT, and pharma exposure. This concentration means fund performance is closely tied to the banking sector's fortunes.

The fund has beaten category average SIP XIRR across all measured horizons, from 1Y (10.9% vs 9.56%) through 12Y (17.31% vs 15.34%), demonstrating sustained peer outperformance over more than a decade. Rolling return means of 19.05% (3Y) and 17.52% (10Y) further point to consistent long-term delivery. The low expense ratio of 0.7% supports this relative advantage.

This fund suits investors seeking Section 80C tax savings with a long-term equity allocation, given the mandatory 3-year lock-in of ELSS funds. Its high bank concentration and single-digit 2026 return make it best suited for investors with moderate-to-high risk tolerance and a horizon of 5-7 years or more. Conservative investors uncomfortable with sector concentration should consider it as one of several holdings rather than a core standalone fund.

• Consistent outperformance versus category SIP XIRR across 1Y to 12Y horizons, including 17.78% vs 15.77% over 10 years
• Broad 58-stock portfolio with strong conviction in quality large-cap banking names, aided by a competitive 0.7% expense ratio
• Long-term consistency, with rolling 3Y mean returns of 19.05% and positive returns in 11 of the last 14 calendar years

• Heavy bank sector concentration of 37.1% with the top five holdings all banks exposes investors to banking sector underperformance
• Current calendar year 2026 return of -9.13% reflects recent market headwinds, and drawdown events exceeding 10% have occurred 9 times